There is an old adage that says that any lawyer who represents themselves has a fool for a client, but this can also apply to non-lawyers as well. Some litigants choose to represent themselves in civil court matters, usually for one of two reasons. Either they are unable to afford the costs of a lawyer (or run out of money partway through a matter), or as a matter of strategy, thinking self-representation is their best option. However, some litigants may find themselves facing high costs awards in their opponents’ favour if their lack of experience or inappropriate behaviour causes undue delay.
Self-Representation Can Raise Costs for All Parties
For example, a 2019 family law decision saw the court award $150,000 in costs to a husband who had been litigating his divorce from his former wife for over 17 years. The court attributed the delay to the wife’s unreasonable behaviour throughout the trial as a self-represented litigant.
In addition to deliberate attempts to slow the process down, or unreasonable behaviour, a self=represented litigant (SRL) can cause delay through no fault of their own. Lawyers have cited having to spend extra time in court explaining processes or rules to SRLs who may be unaware of the standard procedures in court. Not only can this have a detrimental effect on how long a trial takes, but it can raise the legal costs for the other party, whose lawyers are spending more time than necessary explaining rules during proceedings to the SRL on the opposing side.
Self-Representation No Justification for Ignorance of the Law
The case of Ontario Securities Commission v. Bluestream Capital Corporation was recently released by the Ontario Court of Appeal (ONCA). It shows the price that is paid when legal advice is not sought in the hopes of saving money. The debtor was also a victim of fraud, but its strategy of impecuniosity quickly disappeared and turned away any and all sympathy it may have once had. It also lost the ability to argue an appeal that might have provided a defence.
C company was owned by Mr. C., a successful electrical contractor. It was a family holding company used to facilitate tax planning. The company recorded a $200,000 loan to C company from Bluestream Capital Corp (Bluestream) as a shareholders advance from himself and not as a debt to Bluestream.
Bluestream had been used to facilitate securities fraud on Ontario investors. The Ontario Securities Commission (OSC) had obtained an order of disgorgement against Bluestream and its principals. During that process, the OSC noticed the loan from Bluestream to C company and sought its repayment. The OSC issued a garnishment notice to C company. Mr. C was now retired and C company was inactive. Mr. C was given leave to represent his company himself. His sole objection to the garnishment was a claim of set-off against the debt being the losses suffered by C and his family after investing in Bluestream. This went nowhere before the motions judge and the loan was declared a debt of C company to Bluestream. No appeal was made from the order because C company was no longer in business and had no assets.
The OSC dug deeper, holding examinations and reviewing C company’s records. This resulted in a civil action against Mr. and Mrs. C. The action alleged fraudulent conveyances, co-mingling of funds, illegal dividends, etc. Now, some two years after the seemingly meaningless judgement, Mr. and Mrs. C’s personal assets, including their matrimonial home, were at risk. As a result, Mr. C sought an extension of time in which to appeal the judgment.
The motion was dismissed. The clear goal was to cut the legs from under the OSC’s claim. The test for such a motion to be successful was established by the Ontario Court of Appeal in Rizzi v. Mavross as follows:
The overarching principle is whether the “justice of the case” requires that an extension be given. Each case depends on its own circumstances, but the court is to take into account all relevant considerations, including:
(a)whether the moving party formed a bona fide intention to appeal within the relevant time period;
(b) the length of, and explanation for, the delay in filing;
(c) any prejudice to the responding parties, caused, perpetuated or exacerbated by the delay; and
(d) the merits of the proposed appeal.
In the case at hand, the court found that Mr. C was attempting to use his status as an SRL to further delay the matter, claiming he had been unaware of the merits of appealing the original decision against C company. For the following reasons, the court did not accept this argument, and refused his motion to delay:
- The proposed appellant, C. Company, admittedly never formed the intention to appeal the judgment within the time limit for doing so;
- No intention was formed because there was at that point no economic reason to appeal;
- Mr. C’s excuse being ignorance of the law which prejudices him was not sufficient reason to extend the time period;
- Mr. C. represented C Company throughout. He made a tactical decision on behalf of the company to ignore the Judgment as it appeared to be a pointless exercise;
- The ONCA did not see any error in the decision;
- The length of the delay.
All of his stems from the decision to not hire a lawyer. A defence that would potentially have been available to Mr. C was now lost. Litigation is expensive and it’s important to get it right the first time to avoid costly appeals. There is no substitute for the advice and trial management skills of an experienced litigation lawyer.
If you have a question about civil litigation, the highly skilled Toronto corporate lawyers at Milosevic Fiske LLP can help. We are exceptionally experienced with all manners of corporate litigation and we can provide you with advice and guidance suited to your unique situation. Call us at 416-916-1387 or contact us online to learn more about how we can help.